BILL ANALYSIS Senate Research Center H.B. 994 83R2793 JJT-F By: Bonnen, Dennis (Hegar) Business & Commerce 4/25/2013 Engrossed
BILL ANALYSIS
Senate Research Center H.B. 994
83R2793 JJT-F By: Bonnen, Dennis (Hegar)
Business & Commerce
4/25/2013
Engrossed
Senate Research Center
H.B. 994
83R2793 JJT-F
By: Bonnen, Dennis (Hegar)
Business & Commerce
4/25/2013
Engrossed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Texans today are served by an electricity system that boasts a diverse resource basefossil, renewable, and nucleara reliable mix that works as a hedge against regulatory and economic swings. Future citizens of Texas deserve to enjoy those same benefits and, for new nuclear generation to have a future role in Electric Reliability Council of Texas (ERCOT), the legislature must act. The Unites States Nuclear Regulatory Commission (NRC) has requirements regarding the funding to decommissionthat is, to deconstructa nuclear plant at the end its operating life. The NRC requires a decommissioning funding mechanism and, in ERCOT's competitive electricity market, the nuclear project owner must bear the decommissioning cost. In a traditional regulated marker, decommissioning costs are borne by captive ratepayers through rates approved by the Public Utility Commission of Texas (PUC). H.B. 1386, 80th Legislature, Regular Session, 2007, established a state funding program for decommissioning to ensure that new nuclear generating projects in Texas's competitive market can satisfy the NRC requirements and can adequately protect customers. Subsequent to passage of H.B. 1386, PUC adopted the administrative rules necessary to implement the statute. Construction of a proposed nuclear project must begin before January 1, 2015, in order to qualify for the H.B 1386 program. At the time H.B. 1386 was passed, one or more proposed projects were expected to meet this requirement. However, due to recent international industry events, the current economic environment, and low natural gas prices, no proposed projects nor any future projects that may take advantage of breakthrough technologies can meet this construction deadline. This legislation extends the construction deadline until January 1, 2033, preserving the option for development of economically feasible nuclear generation in ERCOT for 20 years. This legislation makes no other changes to the program established by H.B. 1386 nor to the subsequent PUC rules implementing the program. H.B. 994 amends current law relating to the applicability of state law regulating the decommissioning costs of certain newly constructed commercial nuclear-powered electric generating facilities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 39.206(a)(3), Utilities Code, to redefine nuclear generating unit." SECTION 2. Amends Section 39.206(b), Utilities Code, as follows: (b) Provides that this section applies only to the first six nuclear generating units the construction of which begins on or after January 1, 2013, and before January 1, 2033, and which are owned in whole or in part by a power generation company, rather than provides that this section applies only to the first six nuclear generation units under construction by January 1, 2015, owned in whole or in part by a power generation company, that elects to utilize the decommissioning mechanism set forth in this section. SECTION 3. Effective date: upon passage or September 1, 2013.
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Texans today are served by an electricity system that boasts a diverse resource basefossil, renewable, and nucleara reliable mix that works as a hedge against regulatory and economic swings. Future citizens of Texas deserve to enjoy those same benefits and, for new nuclear generation to have a future role in Electric Reliability Council of Texas (ERCOT), the legislature must act.
The Unites States Nuclear Regulatory Commission (NRC) has requirements regarding the funding to decommissionthat is, to deconstructa nuclear plant at the end its operating life. The NRC requires a decommissioning funding mechanism and, in ERCOT's competitive electricity market, the nuclear project owner must bear the decommissioning cost. In a traditional regulated marker, decommissioning costs are borne by captive ratepayers through rates approved by the Public Utility Commission of Texas (PUC).
H.B. 1386, 80th Legislature, Regular Session, 2007, established a state funding program for decommissioning to ensure that new nuclear generating projects in Texas's competitive market can satisfy the NRC requirements and can adequately protect customers. Subsequent to passage of H.B. 1386, PUC adopted the administrative rules necessary to implement the statute.
Construction of a proposed nuclear project must begin before January 1, 2015, in order to qualify for the H.B 1386 program. At the time H.B. 1386 was passed, one or more proposed projects were expected to meet this requirement. However, due to recent international industry events, the current economic environment, and low natural gas prices, no proposed projects nor any future projects that may take advantage of breakthrough technologies can meet this construction deadline.
This legislation extends the construction deadline until January 1, 2033, preserving the option for development of economically feasible nuclear generation in ERCOT for 20 years. This legislation makes no other changes to the program established by H.B. 1386 nor to the subsequent PUC rules implementing the program.
H.B. 994 amends current law relating to the applicability of state law regulating the decommissioning costs of certain newly constructed commercial nuclear-powered electric generating facilities.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 39.206(a)(3), Utilities Code, to redefine nuclear generating unit."
SECTION 2. Amends Section 39.206(b), Utilities Code, as follows:
(b) Provides that this section applies only to the first six nuclear generating units the construction of which begins on or after January 1, 2013, and before January 1, 2033, and which are owned in whole or in part by a power generation company, rather than provides that this section applies only to the first six nuclear generation units under construction by January 1, 2015, owned in whole or in part by a power generation company, that elects to utilize the decommissioning mechanism set forth in this section.
SECTION 3. Effective date: upon passage or September 1, 2013.